The Practice of Packaging Individual Debts into a Single Uniform

question 9

Multiple Choice

The practice of packaging individual debts into a single uniform asset that can be easily bought and sold is called:

• A) leveraging.
• B) securitization.
• C) federally-backed financing.
• D) bundled risk.

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Definitions:

Profit Maximization

The process by which a firm determines the price and output level that returns the greatest profit.

Minimize Cost

The process of finding ways to use the smallest amount of resources or incur the lowest cost in producing goods or services.

Corporation

A legal entity that is separate from its owners, providing limited liability protection to its shareholders.

Sole Proprietorship

A company that is both owned and run by one person, where the law does not separate the owner from the entity itself.